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Recent Economic Reforms in Lebanon:
Economic Freedom & Governance
5th Economic Freedom of the Arab World Conference
Cairo,...
Contents
I. Global ranking
II. Relative ranking in MENA
III. Prominent features of the Lebanese economy
IV. Recent achieve...
I.Global ranking
Lebanon has espoused liberal economic policies since
independence
The public sector remained engaged in f...
Global cont
 Lebanon, however, continues to have a relatively low
ranking in the global economic freedom index
 77th glo...
Global cont
Its rating is burdened by few important components
Corruption is perceived to be high-one of the highest
among...
Global cont
 Property rights (enforcement of contracts) score is low
Its legal system is perceived to be politically
mani...
II.Relative ranking in MENA
7
7.2
7.4
7.6
7.8
8
8.2
2002 2003 2004 2005 2006 2007 2008
FinalGrade
Top Economic Freedom Ach...
Index of Economic Freedom
 The index adopted by Fraser Institute Foundation
relies on Five areas:
 Size of Government
 ...
Lebanon- Economic freedom index
Lebanon’s Ranking in MENA (Fraser Institute):
 Year 2002 : Rank 4
 Year 2003 : Rank 4
 ...
Size of Government- Lebanon
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2002 2008
Grades
Year
General government
consumpt...
Commercial and Economic Law and
Security of Property Rights- Lebanon
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2002 200...
Access to Sound Money-Lebanon
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2002 2008
Grades
Year
Money growth
Standard dev...
Freedom to Trade Internationally
Lebanon
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2002 2008
Grades
Year
Taxes on inter...
Regulation of Credit, Labor & Business
Lebanon
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2002 2008
Grades
Year
Credit M...
Lebanon’s Score Over Time
15
2002 2008
Overall Score 7.8 7.6
Size of Government 8.7 8.4 Subsidy score
Commercial & Economi...
III. Prominent Features of Lebanese
economy
 Lebanon is by far the best performer in the size of
government rating compar...
(Cont.)
2007
1. Gov Consumption /Total consumption = 13.82%
Arab World’s Average = 24%
Transfers & Subsidies/GDP = 7.1%
Ar...
(Cont.)
2. Taxes relatively low
Tax Revenue/ GDP = 14.8%
Income Tax Rate = 20%
World Average = 29.26%
Top Corporate Tax Ra...
19
3. Trade Freedom: one of the highest scores
8.9
IV. Recent Achievements
Paris I, II & III and IMF agreement
Ministry of Finance & Ministry of Trade & Economy
 Gradual re...
Achievements
 Introduced competitiveness law
 Introduced new Property rights law-WIPO based
 Introduced new procurement...
Achievements
 Free Trade Agreements were signed with Lebanon’s major
trading partners; namely:
 The European Union (EU),...
Achievements
23
 Recapitalized banks
 Improved supervision
 Political impasses delay reform
END
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Recent economic reforms in lebanon economic freedom and governance

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Transcript of "Recent economic reforms in lebanon economic freedom and governance"

  1. 1. Recent Economic Reforms in Lebanon: Economic Freedom & Governance 5th Economic Freedom of the Arab World Conference Cairo, November 1-2, 2010 Dr. Mounir Rached- Vice President Mr. Mario Nassar- Project Coordinator 1
  2. 2. Contents I. Global ranking II. Relative ranking in MENA III. Prominent features of the Lebanese economy IV. Recent achievements 2
  3. 3. I.Global ranking Lebanon has espoused liberal economic policies since independence The public sector remained engaged in few functions in education only 15% 0f schools are public The state has limited interference in economic activity Plays the role of regulator (?) 3
  4. 4. Global cont  Lebanon, however, continues to have a relatively low ranking in the global economic freedom index  77th globally 4
  5. 5. Global cont Its rating is burdened by few important components Corruption is perceived to be high-one of the highest among peers. 102nd out of 179 Corruption is well entrenched 5
  6. 6. Global cont  Property rights (enforcement of contracts) score is low Its legal system is perceived to be politically manipulated  Investment freedom score is low Restricted licensing- cumbersome administrative procedures- multiple phases- Ceilings on certain investments No restriction ,however, on capital flows-private & enterprises 6
  7. 7. II.Relative ranking in MENA 7 7.2 7.4 7.6 7.8 8 8.2 2002 2003 2004 2005 2006 2007 2008 FinalGrade Top Economic Freedom Achievers in the Arab World (Fraser Institute) Bahrain Jordan Kuwait Lebanon Oman Qatar 7
  8. 8. Index of Economic Freedom  The index adopted by Fraser Institute Foundation relies on Five areas:  Size of Government  Commercial & Economic Law and Security of Property Rights  Access to Sound Money  Freedom to Trade Internationally  Regulation of Credit, Labor and Business 8
  9. 9. Lebanon- Economic freedom index Lebanon’s Ranking in MENA (Fraser Institute):  Year 2002 : Rank 4  Year 2003 : Rank 4  Year 2004 : Rank 5  Year 2005 : Rank 4  Year 2006 : Rank 4  Year 2007 : Rank 3  Year 2008 : Rank 3 9
  10. 10. Size of Government- Lebanon 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 2002 2008 Grades Year General government consumption spending as a percentage of total consumption Transfers and subsidies as a percentage of GDP Government enterprises and investment Top marginal tax rate Rank in the Arab World (2008): 1
  11. 11. Commercial and Economic Law and Security of Property Rights- Lebanon 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 2002 2008 Grades Year Military interference in rule of law and the political process Integrity of the legal system Regulatory restrictions on the sale of real property Legal enforcement of contracts Rank in the AW (2008): 15
  12. 12. Access to Sound Money-Lebanon 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 2002 2008 Grades Year Money growth Standard deviation of inflation Inflation: Most recent year Freedom to own foreign currency bank accounts Rank in the AW (2008): 3
  13. 13. Freedom to Trade Internationally Lebanon 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 2002 2008 Grades Year Taxes on international trade Black-market exchange rates Capital controls Rank in the AW (2008): 11
  14. 14. Regulation of Credit, Labor & Business Lebanon 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 2002 2008 Grades Year Credit Market Regulations Labour Market Regulations Business Regulations Rank in the AW (2008): 3
  15. 15. Lebanon’s Score Over Time 15 2002 2008 Overall Score 7.8 7.6 Size of Government 8.7 8.4 Subsidy score Commercial & Economic Law & Security of Property Rights 6.1 6.1 Access to Sound Money 9.6 8.8 inflation score Freedom to Trade Internationally 7.3 6.8 capital controls score Credit, Labor, and Business 7.2 8.0 labor market improved
  16. 16. III. Prominent Features of Lebanese economy  Lebanon is by far the best performer in the size of government rating compared to the Arab World 16
  17. 17. (Cont.) 2007 1. Gov Consumption /Total consumption = 13.82% Arab World’s Average = 24% Transfers & Subsidies/GDP = 7.1% Arab World’s Average = 7.84% 17
  18. 18. (Cont.) 2. Taxes relatively low Tax Revenue/ GDP = 14.8% Income Tax Rate = 20% World Average = 29.26% Top Corporate Tax Rate = 15% World Average = 25.1% VAT =10% 18
  19. 19. 19 3. Trade Freedom: one of the highest scores 8.9
  20. 20. IV. Recent Achievements Paris I, II & III and IMF agreement Ministry of Finance & Ministry of Trade & Economy  Gradual reduction of customs  Introduced ASYCUDA to customs clearance  Introduced VAT  Developing and modernizing tax procedures  Restructuring of Tax office  Automate tax payment  Promoting transparency and openness to the public 20
  21. 21. Achievements  Introduced competitiveness law  Introduced new Property rights law-WIPO based  Introduced new procurement law  Social security reform initiated  Privatization remains undecided (how to privatize) ` 21
  22. 22. Achievements  Free Trade Agreements were signed with Lebanon’s major trading partners; namely:  The European Union (EU),  The EFTA States (Switzerland, Lichtenstein, Norway, Iceland) and  The Gulf Cooperation Countries (GCC); and  A full establishment of the Greater Arab Free Trade Area (GAFTA) was achieved in January 2005  Lebanon is also actively negotiating accession to the World Trade Organization (WTO) 22
  23. 23. Achievements 23  Recapitalized banks  Improved supervision  Political impasses delay reform END
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